Reviews investors’ concerns of capital overhang and interim valuations, and highlights that investors should keep in mind that downturns are part of the nature of this asset class, and this one comes on the heels of an unprecedented upswing.
An analysis of the rapidly expanding private equity markets in the U.K. and continental Europe using the following criteria: sources of capital, market segments, valuations, leverage, and exit environment. Also included are summaries of individual country markets and exhibits covering capital commitments, EBIT purchase multiples, IPOs, M&As, and distributions to limited partners.
U.K. investors, although weary of high global equity correlations and the recent outperformance of U.K. equities, should not decrease their non-U.K. equity allocations for the following reasons: correlations have varied widely and could fall again; and U.K.-only mandates sacrifice 90% of the available opportunity set, represent relatively concentrated portfolios unless they take on significant tracking…
In recent years, the outperformance of their domestic markets relative to international markets has prompted U.S. and European investors to question the wisdom of global investing. Despite the superior risk-adjusted returns of U.S. equities and high correlations with other developed markets in recent years, investors should resist the urge of purging non-U.S. equities from their…
Over the course of the 18.25-year bull market, more than half of the market’s capital appreciation was driven by inflation and the decline in interest rates, and another 20% by multiple expansion, leaving only about 20% of the appreciation attributable to real earnings growth. Between March 31, 2000 and March 31, 2002, inflation continued to…
This survey-based report examines five main areas of endowment management expense (investment management, investment supervision, custody, legal, and accounting/audit) and explores funding sources for each.
Equity ownership remains low in Europe due to undeveloped public equity markets, generous pension plans, and the lack of tax incentives. European bulls cite the following to argue that ownership will rise: (1) the bull market of the late 1990s raised awareness of equities, (2) with falling interest rates, Europeans are looking to equities for…
As of April 1, 2002, the Japanese government will cease guaranteeing time deposits in excess of ¥10 million ($75,200) against the possibility of bank failure, leaving an estimated ¥200 trillion ($1.5 trillion) in bank deposits unprotected. Proponents of postponement of the deadline are worried that the limit on deposit insurance will prompt bank runs, especially…
Despite the persistent fall in equity prices, analyst expectations of S&P 500 earnings remain quite optimistic. Historical precedent suggests that earnings could well rebound within the time horizon envisaged by analysts, but are unlikely to prove as robust as they expect.
An assessment of the investment opportunities resulting from a debilitating combination of successive recessions in Japan and the reluctance of government officials to enact and enforce financial sector reforms. Key topics include market risks, supply of distressed assets, strategies to capitalize on the opportunity, and investment vehicles and fund structures.